I do a lot of charting over a lot of things. I do them every day. It is a hobby and one that I spend hours on every day. Over time I have noticed that Elliott waves are easily seen in many of these charts. Many of these charts have nothing to do with stocks. Many have to do with complex relationships between other things that are measurable such as debt:gdp, gold:silver ratio and other derived charts. Today I am going to share something that might blow your mind the way it did mine: the big epiphany and the reason I spend so much time on charting and practicing EW.
Before I get into that, many very bright minds already believe that the universe is a huge fractal. Many others believe that waves play an essential part in its operation. The essence of the Elliott wave principle is fractalized waves. It is often said that the language of the universe is math. If the universe has a language then it implies intelligence. Perhaps that's what people refer to when they say "God". In any case, the periodic table of the elements shows, without any doubt whatsoever, that the universe is not simply random. There is an order to it and only a moron would believe that we primitive humans fully understand the order of the universe. We are not even close. That means that your gut feel on the matter is probably WRONG and that the only thing that makes sense to do is to gather and analyze data in order to see if repeating patterns emerge that will help us increase our understanding. THAT is what I am doing with my charting. I am gathering and analyzing data and the analysis goes well beyond trying to yank a few bucks out of the stock market Ponzi.
Which brings me to my next point. Have a look at this next chart. It is not a stock but for now, let's give it a ticker symbol to refer to. I choose the imaginary ticker "SUN". Click on the chart and check out the detail. I applied a wave count that is completely valid under my understanding of the EW rules. Note the aspects of parallelism and alternation in the left hand side of the chart. Note how the chart gets choppy and tentative near the peak signaling a turn. Note how the 1st wave down into red 1 recovers strongly into wave 2 in a vee style recovery and that I have noted many times in these pages that 2nd waves are often vee's. Note the declining double top between the 5th wave peak and wave red 2. That spells mucho trouble. Notice how wave 1 down broke well below the prior 4th. This was a warning!! Then observe the rapid scramble to make a new high only to find that brick wall resistance is met right at the breakdown of the 5th wave ending diagonal!! That re-test from below was wave 2. After that failed the direction is increasingly down. From there we see 5 waves down into 1 of 3 (I put a red rectangle around it to make it easier to see), another big attempt to break out into 2 of 3 but which left us with yet another lower high. After this, the chart gave up the ghost as wave 3 of 3 plunges massively per unit time.
In order to see what the above chart was taken from, scroll below this big lettering, but don't do it until you have read and thought about the above chart and the wave count and the back tests and the alternation, etc. In other words, that chart is FULL of predictable order, just like the entire universe is. So this is your chance to think about that for a minute before scrolling down.
Without this moment of thought, you might let your herding instincts override the obvious conclusion of the careful data analysis that I performed on this data set; you might be tempted to summarily dismiss exactly what it is that I hope you will pay attention to.
When you have given the chart careful consideration, please scroll down.
You might be surprised to learn that the chart is that of the power generation over the course of a day for a personal solar farm. The red curve is the approximate underlying function (yes, it is a wave and it repeats day after day like clockwork and with predictable order). The variations from the base function are clouds and other factors that limit the amount of light collected.
Somehow these variations manage to occur using EW rules. I don't claim to understand it but I did not cherry pick this chart. I picked it at random and that suggests, along with so many other charts like it, that there must be some kind of non-understood order of things in play, perhaps similar to the order that existed all this time in the periodic table of the elements but which was only discovered by man through observation and analysis of the available data by Dimitri Mendeleev back in 1869.
Had anyone predicted that this type of hidden order was present before then, it would have been met with laughter and derision. That is basic herding behavior. If people don't understand something or they don't like the message because it drives them out of their comfort zone of understanding, they attack the messenger despite the presence of data. What they should, in fact, be doing is coming up with conflicting evidence. But that is work and it takes intelligence and insight and so few will do it. Most will just roll their eyes.
Which camp do you fall into?
Fascinating, Captain! All along I was guessing solar spots (tip!), but a solar array did blow me away.
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